Insured losses from Japan quake could hit $35 billion

Last week’s earthquake in Japan could lead to insured losses of nearly $35 billion, risk modeling company AIR Worldwide said, making it one of the most expensive catastrophes in history.

That figure is nearly as much as the entire worldwide catastrophe loss for the global insurance industry in 2010, and could be the triggering event that forces higher prices in the insurance market after years of declines.

AIR said its loss estimate range was $14.5 billion to $34.6 billion. That was based on a range of 1.2 trillion yen to 2.8 trillion yen, converted at 81.85 yen to the dollar.

The company cautioned that the estimate was preliminary, and its models do not factor in the effects of the tsunami that followed the earthquake, or any potential losses from nuclear damage.

AIR said that in many cases, buildings will have been damaged by the 8.9-magnitude earthquake and then swept away by the flooding thereafter, making precise counting difficult. The firm intends to issue updated estimates in future combining the quake and the floods.